_Chancellor overturns business rates staircase tax and caps increases in rates for 2018

In July 2015 the Supreme Court determined in Woolway (VO) v Mazars, that businesses who occupied different parts of a building could not be assessed together unless they had their own exclusive access between the areas.

This overturned the policy which had existed since the 1950’s to assess all parts of a business together where they are contiguous ( vertically or horizontally touching ).

The Valuation Office Agency (VOA) have implemented this decision which resulted in significant numbers of businesses losing their right to Small Business Rates Relief and facing backdated rate charges.

This is because when an assessment is split up the ratepayer loses his right to small business rates relief if more than two assessments are higher than RV £ 2,899.

In addition, large swathes of businesses who occupy office blocks in London have previously had discounts to their rates where their floors were assessed together. These quantum discounts depend on size and in some cases were as high as 25%.

After the decision the industry lobbied Government to change the legislation but to no avail and this has caused widespread backdated charges.

The announcement today is set to overturn all this and legislation is set to be put in place to allow the mergers to be reinstated and backdated to April 2010.

“ It is welcome news that the mess and unnecessary costs caused by the implementation of the Supreme Court decision will now be stopped in its tracks and reversed.

"If this is a new dawn with the Government listening to the Experts once more, then hopefully they will now look at the new rating appeals system which is not working and is causing an equal unnecessary mess” said  Keith Cooney, National Head of Business Rates. 

If you think these changes may impact your business or for general advice contact Keith Cooney or visit Knight Frank Business Rates.